Stock Market Update

[BRIEFING.COM] The November employment report had a positive reception by the stock and bond markets, as it was neither too hot nor too cold. By and large, the results were close to expectations, which in turn helped solidify the market's thinking that the Fed will go ahead with another rate cut at its December 17-18 FOMC meeting.

Currently, the probability of a 25-basis points rate cut to 4.25-4.50% sits at 90.5% versus 70.1% in front of the report, according to the CME FedWatch Tool. The 2-yr note yield, which is more sensitive to changes in the fed funds rate, has responded in kind, going from 4.17% to 4.08% after the report. The 10-yr note yield went from 4.18% to 4.13%.

The drop in market rates has been a support factor for the stock market, which shows gains across the board for the major indices that are being led by the consumer discretionary (+1.3%) and information technology (+0.6%) sectors.

Just in, the preliminary University of Michigan Index of Consumer Sentiment for December increased to 74.0 (Briefing.com consensus 73.5) from the final reading of 71.8 for November.